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Michael P. Vandenbergh* & Jonathan A. Gilligan**
Introduction .............................................................................. 218
I. Urgency ............................................................................... 226
A. Climate Targets .............................................................. 227
B. Private Governance Wedge ............................................ 231
II. Barriers ............................................................................... 233
A. National Legislation ....................................................... 234
B. International Agreement ................................................ 237
C. Other Options ................................................................. 239
III.Private Governance ........................................................... 242
A. Model of Private Climate Governance Drivers ............. 243
i. Technical Potential ...................................................... 243
ii. Behavioral Plasticity ................................................... 244
iii.Policy Plasticity ........................................................... 251
B. Motivating Action ........................................................... 256
i. Private Climate Prediction Market ............................ 256
ii. Private Climate Legacy Registry ................................ 258
IV.Corporate and Household Emissions ................................. 260
A. Corporate Emissions....................................................... 260
i. Sector-Specific Initiatives ........................................... 261
*
David Daniels Allen Distinguished Chair of Law, Director, Climate Change
Research Network, and Co-Director, Energy, Environment and Land Use Program,
Vanderbilt University Law School. For comments on the initiatives included in the
private climate governance strategy, the authors thank the participants at workshops
at the Center for Research on Environmental Decisions at Columbia University, the
Radcliffe Institute for Advanced Study at Harvard University, the Kellogg School of
Management at Northwestern University, the Environmental Science and Policy
Program at Michigan State University, the Ostrom Workshop at Indiana University,
and the Private Governance Workshop at Vanderbilt University. Linda Breggin, Mark
Cohen, Paul Edelman, Andy Mims, Ed Rubin, J.B. Ruhl, Kevin Stack, and Alan
Wiseman provided helpful insights. Daniel Raimi provided research support on energy
policy issues, and Lorraine Baer, Nicholas Brill, Emily Burns, Leland Frost, Janelle
Geddes, Travis Gray, Kimberly Huey, Sara Jane McMahon, and Amanda Nguyen
provided research support on other aspects of the Article.
**
Associate Professor, Department of Earth and Environmental Sciences, and
Associate Director for Research, Climate Change Research Network, Vanderbilt
University.
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13. See, e.g., Thomas Dietz, Gerald T. Gardner, Jonathan Gilligan, Paul C. Stern &
Michael P. Vandenbergh, Household Action Can Provide a Behavioral Wedge to
Rapidly Reduce US Carbon Emissions, 106 PROC. NATL ACAD. SCI. 18452, 18455 (2009)
(evaluating technical potential and behavioral plasticity of 17 action types); see also
Benjamin Sovacool, Energy Studies Need Social Science, 511 NATURE 529, 52930
(2014) (discussing need to broaden energy policy analysis).
14. See Michael P. Vandenbergh & Anne C. Steinemann, The Carbon-Neutral
Individual, 82 N.Y.U. L. REV. 1673 (2007); Gerald T. Gardner & Paul C. Stern, The
Short List: The Most Effective Actions U.S. Households Can Take to Curb Climate
Change, 50 ENVT 12, 1216 (2008).
15. See, e.g., Michael P. Vandenbergh & Mark A. Cohen, Climate Change
Governance: Boundaries and Leakage, 18 N.Y.U. ENVTL. L.J. 221, 221 (2010)
(discussing corporate emissions).
16. See, e.g., WILLIAM PRINDLE, U.S. ENVTL PROTECTION AGENCY, ENERGY
EFFICIENCY AS A LOW-COST RESOURCE FOR ACHIEVING CARBON EMISSIONS
REDUCTIONS, 4-1 to 4-3 (2009); INTL ENERGY AGENCY, MIND THE GAP: QUANTIFYING
PRINCIPAL-AGENT PROBLEMS IN ENERGY EFFICIENCY (2007) (summarizing research on
market failures in energy efficiency).
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30. See infra Parts III and IV. For other examples of private governance, see
Ganesh Sitaraman, Contracting Around Citizens United, 114 COLUM. L. REV. 755
(2014) (election law); Bernstein & Cashore, supra note 10 (political science); David
Vogel, The Private Regulation of Global Corporate Conduct, 49 BUS. & SOCY 68, 68
(2010) (business ethics); Tim Bartley, Certifying Forests and Factories: States, Social
Movements, and the Rise of Private Regulation in the Apparel and Forest Products
Fields, 31 POL. & SOCY 433, 43334 (2003) (sociology); Marc Allen Eisner, Private
Environmental Governance in Hard Times: Markets for Virtue and the Dynamics of
Regulatory Change, 12 THEORETICAL INQUIRIES L. 489 (2011) (public policy); Kenneth
W. Abbott & Duncan Snidal, The Governance Triangle: Regulatory Standards
Institutions and the Shadow of the State, in THE POLITICS OF GLOBAL REGULATION 44,
46 (Walter Mattli & Ngaire Woods eds., 2009) (international relations); David P. Baron,
Private Politics, Corporate Social Responsibility, and Integrated Strategy, 10 J. ECON.
& MGMT. STRATEGY 7 (2001) (economics); Errol E. Meidinger, Environmental
Certification Programs and U.S. Environmental Law: Closer Than You Think, 31
ENVTL. L. REP. 10162 (2001) (environmental law); TIMOTHY LYTTON, KOSHER: PRIVATE
REGULATION IN THE AGE OF INDUSTRIAL FOOD (2012) (food regulation).
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31. James Hansen et al., Scientific Case for Avoiding Dangerous Climate Change to
Protect Young People and Nature, 8 PLOS ONE e81648 (2013), available at http://
dx.doi.org/10.1371/journal.pone.0081648 [http://perma.cc/QH2R-JB25] (last visited
June 7, 2015).
32. For a discussion of the advantages and disadvantages of the 2C goal, see Cline
Guivarch & Stphane Hallegatte, 2C or Not 2C?, 23 GLOBAL ENVTL. CHANGE 179, 180
88 (2013). For a discussion of the importance of focal points, see Andrew T. Guzman &
Timothy L. Meyer, International Soft Law, 2 J. LEG. ANALYSIS 171, 189 (2010).
33. See, e.g., NORDHAUS, supra note 22, at 7677, 14041 (discussing different
temperature targets).
34. See Guivarch & Hallegatte, supra note 32, at 192; see also NORDHAUS, supra
note 22, at 22024 (summarizing basis for 2C target).
35. See David G. Victor & Charles F. Kennel, Climate Policy: Ditch the 2C
Warming Goal, 514 NATURE 30, 3031 (2014).
36. See United Nations Framework Convention on Climate Change, Copenhagen,
Den., Dec. 718, 2009, Draft Decision. U.N. Doc. FCCC/CP/2009/L.7 (Dec. 18, 2009).
37. United Nations Framework Convention on Climate Change, Cancun, Mexico.,
Nov. 29 Dec. 10 2010, The Cancun Agreement: Outcome of the Work of the Ad Hoc
Working Group on Long-Term Cooperative Action Under the Convention, U.N. Doc.
FCCC/CP/2010/7/Add.1 (Mar. 15, 2011) .
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50. EDENHOFER, supra note 47, at 32; NORDHAUS, supra note 22, at 17879
(concluding that the cost of meeting the Copenhagen objective of 2C would be modest
if it is undertaken efficiently . . . . [But] delayed participation of a substantial part of
the world will make it virtually impossiblenot just costlyto meet the Copenhagen
objective of 2C); id. at 17881 (finding that unless virtually all countries participate
very soon, and do so in an efficient manner, . . . limiting the increase in global
temperature to 2C is not possible, and that if some countries take prompt action but
many others delay action until the twenty-second century, the costs rise very quickly
for temperature targets below 4C); INTERNATIONAL ENERGY AGENCY, WORLD ENERGY
OUTLOOK 2014, Annex A 24 (2014) (emphasizing that without steep emissions cuts
before 2040 it will be impossible to keep warming below 2C).
51. COUNCIL OF ECONOMIC ADVISORS, EXECUTIVE OFFICE OF THE PRESIDENT, THE
COST OF DELAYING ACTION TO STEM CLIMATE CHANGE 3 (2014); EDENHOFER, supra
note 47, at 33, fig. TS.13 (finding that delaying action until 2030 could more than
double the cost of achieving 2C); see also L. Clarke et al., Assessing Transformation
Pathways, in CLIMATE CHANGE 2014: MITIGATION OF CLIMATE CHANGE 53 (O.
Edenhofer et al. eds., 2014) (reporting that even if some countries took prompt action,
delays by others until 2030 or 2050 could raise mitigation costs by 50% to more than
100%).
52. NORDHAUS, supra note 22, at 300.
53. Steven J. Davis et al., Future CO2 Emissions and Climate Change from Existing
Energy Infrastructure, 329 SCI. 1330, 1330 (2010).
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million tons per year, over and above the emissions reductions
that will be achieved through likely government policies.
II. BARRIERS
The most obvious institutional candidates to achieve major
emissions reductions are government regulation or government
intervention in markets to establish a carbon price. Many
national governments have the legitimacy and the coercive
power necessary to dictate emissions reductions within their
borders and have the capacity to negotiate international
agreements that include credible emissions reduction
commitments from other countries. Scholars have identified
pricing carbon as the most efficient means by which
governments can reduce emissions,60 and much of the scholarly
and policy activity has focused on the design of a domestic and
international carbon price.61 Pricing carbon can limit global
warming at a small cost if it is implemented quickly and
universally. The greater the delays or the more nations fail to
join a pricing accord, however, the less efficient and more
expensive the policies will be.62
Will a carbon price be adopted and implemented in the
United States and by the other major emitting nations in the
next decade? It is certainly possible. Only a dozen countries
60. See Gilbert E. Metcalf & David Weisbach, The Design of A Carbon Tax, 33 HARV.
ENVTL. L. REV. 499, 517 (2009); Reuven S. Avi-Yonah & David M. Uhlmann,
Combating Global Climate Change: Why a Carbon Tax Is a Better Response to Global
Warming Than Cap and Trade, 28 STAN. ENVTL. L.J. 3, 45 (2009).
61. See Nell Greenfield-Boyce, Climate Change Adjustments Must Be Fast and
Major, NATL PUB. RADIO (Apr. 13, 2014, 9:40 AM), http://www.npr.org/blogs/thetwoway/2014/04/13/302541260/climate-change-adjustments-must-be-fast-and-large-u-npanel-says [http://perma.cc/YHJ8-GG45] (discussing comments from Robert Stavins
discussing IPCC report conclusion that action is needed in fifteen years and advocating
carbon tax); N. Greg Mankiw, A Missed Opportunity on Climate Change, N.Y. TIMES,
Aug. 9, 2009, at BU4 (regarding a Harvard economist and former advisor to President
George W. Bush advocating for carbon tax); WARWICK J. MCKIBBIN ET AL., THE
ECONOMIC CONSEQUENCES OF DELAYS IN U.S. CLIMATE POLICY (2014), available at
http://www.brookings.edu/~/media/research/files/papers/2014/06/03%20economic%20co
nsequences%20delay%20us%20climate%20policy/03_economic_consequences_delay_us
_climate_policy.pdf [http://perma.cc/FGN9-YUL7].
62. See Vandenbergh & Cohen, supra note 15, at 221 (finding that if many of the
worlds largest-emitting nations participated in a pricing agreement, incentives for
leakage could be reduced, which would make the policies more effective); NORDHAUS,
supra note 22, at 17679, 300.
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temperature goal.
Estimates of the global carbon price
necessary in 2020 to achieve the 2C target vary from roughly
$15 to well over $200 per metric ton of CO2.67 Developed
countries will likely need to bear a greater share of the
mitigation costs than developing countries, and one analysis
suggests that achieving the 450 ppm target would require a
U.S. carbon price of roughly $53 per ton by 2015, increasing to
$210 per ton by 2050.68 The longer the carbon price is delayed,
the higher the price must be.69 In addition, since the carbon
price must go up over time to achieve the reductions needed in
later years, the initial legislation must include a schedule of
increasing taxes or declining caps, or legislative battles must
be re-fought every several years.
The recent history of environmental law suggests the
difficulty of adopting any major federal pollution control
legislation. After the enactment of more than a dozen major
statutes from 1970 through 1990, none has been enacted in the
ensuing quarter century.70 Climate change presents challenges
to a legislative response that are at least as great as those
67. See Leon Clarke et al., International Climate Policy Architectures: Overview of
the EMF 22 International Scenarios, 31 ENERGY ECON. S64, tbl.5 (2005) (using 450 ppm
CO2 target); see also Kriegler et al., The Role of Technology for Achieving Climate
Objectives: Overview of the EMF-27 Study on Global Technology and Climate Policy
Strategies, 123 CLIMATIC CHANGE 353 (2014) (concluding that a 450 ppm target would
require a 20202100 average price of $12 to $92 per metric ton of CO2); NORDHAUS,
supra note 22, at 228 (reporting prices of $60 to more than $200 per ton in 2050 to
achieve a more modest 2.5C target). The form of the carbon tax also could affect its
political feasibility. See Tracey M. Roberts, Mitigating the Distributional Impacts of
Climate Change Policy, 67 WASH. & LEE L. REV. 209 (2010).
68. See SERGEY PALTSEV ET AL., MIT JOINT PROGRAM ON THE SCIENCE AND POLICY
OF GLOBAL CHANGE, ASSESSMENT OF U.S. CAP-AND-TRADE PROPOSALS (2007)
(estimating 2015 CO2e price of $53 and 2050 price of $210 per ton). The EIA basic case
projection of carbon prices under the Waxman-Markey cap and trade bill, which used a
450 ppm CO2e target, priced carbon at $18 in 2012, increasing to $32 in 2020 and $65
in 2030.
69. See Clarke et al., supra note 69, at tbl.5; see also Kriegler et al, supra note 67, at
353 (concluding that a 450 ppm target would require the 20202100 average price of
$12 to $92).
70. Vandenbergh, supra note 3, at 140; see also Michael P. Vandenbergh, The
Emergence of Private Environmental Governance, 44 ENVTL. L. REP. 10125, fig.1 (2014)
(noting absence of major pollution control statutes from 19912013); David Uhlmann,
The Quest for a Sustainable Future, 1 MICH. J. ENVTL. & ADMIN. L. 1, 9 (2012); Richard
J. Lazarus, Congressional Descent:
The Demise of Deliberative Democracy in
Environmental Law, 94 GEO. L.J. 619, 619 (2006) (describing congressional action as
effectively moribund).
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71. See, e.g., Murray Griffin, Australian Party with Balance of Power Refuses to
Back New Carbon Policy, 37 INTL ENVT. REP. 948, 948 (2014),.
72. See generally Richard J. Lazarus, Super Wicked Problems and Climate Change:
Restraining the Present to Liberate the Future, 94 CORNELL L. REV. 1153, 115556
(2009) (identifying climate challenges); Thomas Dietz, Elinor Ostrom & Paul C. Stern,
The Struggle to Govern the Commons, 302 SCI. 1907, 1907 (2003).
73. See MANCUR OLSON, JR., THE LOGIC OF COLLECTIVE ACTION: PUBLIC GOODS AND
THE THEORY OF GROUPS 1112 (1965).
74. See Coral Davenport, Obama Pursuing Climate Accord in Lieu of Treaty, N.Y.
TIMES, Aug. 27, 2014, at A1.
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75. See Dan M. Kahan, Ideology, Motivated Reasoning, and Cognitive Reflection, 8
JUDGMENT & DECISION MAKING 407, 413 (2013); Dan Kahan, Fixing the
Communications Failure, 463 NATURE 296, 297 (2010).
76. See Aaron M. McCright & Riley E. Dunlap, The Politicization of Climate Change
and Polarization in the American Publics Views of Global Warming, 20012010, 52
SOC. Q. 155, 193 (2011).
77. For an overview, see Michael P. Vandenbergh, Kaitlin T. Raimi & Jonathan M.
Gilligan, Energy and Climate Change: A Climate Prediction Market, 61 UCLA L. REV.
1962 (2014).
78. See VICTOR, supra note 26, at 1.
79. NORDHAUS, supra note 22, at 179 (stating that delayed participation of a
substantial part of the world will make it virtually impossiblenot just costlyto meet
the Copenhagen objective of 2C).
80. For a discussion of whether the climate problem is better analyzed as a public
good or common pool resource, see Daniel H. Cole, Climate Change and Collective
Action, 61 CURRENT LEGAL PROBLEMS 229, 230 (2008).
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natural gas and other factors, they will enable the U.S. to make
substantial emissions reductions. The anticipated reductions
from current and likely new government policies in the U.S.
and elsewhere are included in the 450 pathway discussed at
the end of Part I, however, and this will still leave the 4
gigaton gap over the next decade between what likely
government policies will achieve and the 450 pathway. In
response to the limits of current efforts, scholars have
suggested several innovative responses to the gridlock at the
national and international level.
Climate Clubs. Rather than focusing on the design of a
comprehensive international agreement to price carbon, David
Victor and others have drawn on club theory in economics and
the example of multilateral trade agreements to propose
limited climate agreements that can appeal to the interests of a
few nations at first and attract additional participants over
time.87 This work suggests that clubs of countries can form
over shared interests and can attract other countries with
similar incentives. As more countries join these clubs, the
benefits of participating could increase, leading to meaningful
numbers of participants and emissions reductions.88
Polycentric Governance. Before her recent death, Nobel
laureate Elinor Ostrom and colleagues began applying the
concept of polycentric governance to climate mitigation.89
Polycentric governance, first applied to the management of
water resources and the provision of municipal services, refers
to the use of multiple scales of government and NGOs to
87. See VICTOR, supra note 26, at 34; Robert O. Keohane & David G. Victor, The
Regime Complex for Climate Change, 9 PERSP. ON POL. 7, 7 (2011); Matt Potoski &
Aseem Prakash, Green Clubs:
Collective Action and Voluntary Environmental
Programs, 16 ANN. REV. POL. SCI. 399 (2013).
88. For an example of a bilateral agreement that targets GHG emissions, see Press
Release, White House, Fact Sheet: U.S.-China Joint Announcement on Climate
Change and Clean Energy Cooperation (Nov. 11, 2014), available at http://www.white
house.gov/the-press-office/2014/11/11/fact-sheet-us-china-joint-announcement-climatechange-and-clean-energy-c [http://perma.cc/W8DW-E3AR].
89. See Elinor Ostrom, Nested Externalities and Polycentric Institutions: Must We
Wait for Global Solutions to Climate Change Before Taking Actions at Other Scales?, 49
ECON. THEORY 353 (2012); Daniel Cole, From Global to Polycentric Governance, 2
CLIMATE L. 395 (2011); Benjamin K. Sovacool, An International Comparison of Four
Polycentric Approaches to Climate and Energy Governance, 39 ENERGY POLY 3832
(2011).
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efficient light bulb uptake by Republicans); Irena Fegina et al., System Justification,
the Denial of Global Warming, and the Possibility of System-Sanctioned Change, 36
PERSONALITY & SOC. PSYCHOL. BULL. 326 (2010) (noting the influence of emphasizing
maintenance of the status quo).
111. This is not a trivial concern. See, e.g., Dena M. Gromet et al., Political Ideology
Affects Energy-Efficiency Attitudes and Choices, 110 PROC. NATL ACAD. SCI. 9314, 9315
(2013) (noting that a climate-based message reduced efficient light bulb uptake by
Republicans); Vandenbergh et al., supra note 85, at 757 (citing studies).
112. See, e.g., Colin Camerer et al., Regulation for Conservatives: Behavioral
Economics and the Case for Asymmetric Paternalism, 151 U. PA. L. REV. 1211 (2003)
(discussing the potential appeal of behavioral options for conservatives); Vandenbergh
et al., supra note 77, at 196670 (discussing literature on world views and confirmation
bias).
113. John Kerry, Newt Gingrich Take on Environment, Each Other, FOX NEWS, Apr.
11, 2007, http://www.foxnews.com/story/2007/04/11/john-kerry-newt-gingrich-take-onenvironment-each-other/ [http://perma.cc/Y2EA-F76G] (quoting Gingrich calling for
green conservatism that would urgently reduce carbon emissions using
entrepreneurially, market-oriented, and locally led environmentalism).
114. See, e.g., Einer Elhauge, Sacrificing Corporate Profits in the Public Interest, 80
N.Y.U. L. REV. 733, 77071 (2005) (discussing business judgment rule). For examples
of successes and failures in corporate environmental initiatives, see DANIEL C. ESTY &
ANDREW WINSTON, GREEN TO GOLD: HOW SMART COMPANIES USE ENVIRONMENTAL
STRATEGY TO INNOVATE, CREATE VALUE, AND BUILD COMPETITIVE ADVANTAGE (2006).
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115. For the original efficient markets work, see Eugene Fama, Efficient Capital
Markets: A Review of Theory and Empirical Work, 25 J. FIN. 383 (1970).
116. See THE CARBON TRUST, CARBON FOOTPRINTS IN THE SUPPLY CHAIN: THE NEXT
STEP FOR BUSINESS 1114 (2006), available at https://www.carbontrust.com/media/
84932/ctc616-carbon-footprints-in-the-supply-chain.pdf [https://perma.cc/8XXH-J5TM].
117. Id. at 14.
118. See, e.g., DANIEL A. DIERMEIER, REPUTATION RULES (2013) (examining the role
of reputation in corporate behavior).
119. See Mark A. Cohen & Michael P. Vandenbergh, The Potential Role of Carbon
Labeling in a Green Economy, 34 ENERGY ECON. S53S63 (2012) (citing studies).
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131. Ronald H. Coase, The Problem of Social Cost, 3 J.L. & ECON. 1 (1960).
132. See Vandenbergh & Cohen, supra note 15, at 22324; see also OSTROM, supra
note 4, at 1213.
133. Emissions trading systems have been implemented in the European Union,
Korea, California, and almost a dozen Northeastern states.
134. These private carbon offsets accounted for $523 million and 101 million tons of
GHG emissions in 2012. See ECOSYSTEM MARKETPLACE, STATE OF THE VOLUNTARY
CARBON MARKETS 2013, available at http://www.ecosystemmarketplace.com/pages/
dynamic/article.page.php?page_id=9789 [http://perma.cc/ZN2F-4BDY].
135. See Mark A. Cohen & W. Kip Viscusi, The Role of Information Disclosure in
Climate Mitigation Policy, 3 CLIMATE CHANGE ECON. 1, 21 (2012). See also PRINDLE,
supra note 16; Paul C. Stern et al., Design Principles for Carbon Emissions Reduction
Programs, 44 ENVTL. SCI. & TECH. 4847, 484748 (2010).
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141. See Ostrom, supra note 91, at 6; OSTROM, supra note 4, at 88102; see also
Vandenbergh, supra note 3, at 16465 (discussing the parallels between the small
communities studied by Ostrom and others and the community of global corporate
sustainability managers and NGO managers).
142. See, e.g., Laura DAndrea Tyson, The Challenges of Running Responsible
Supply Chains, N.Y. TIMES ECONOMIX BLOG, http://economix.blogs.nytimes.com/
2014/02/07/the-challenges-of-running-responsible-supply-chains/
[http://perma.cc/
M4BZ-G44T] (last visited Apr. 14 2015) (Major global retailers run the risk of harming
their brand and alienating their consumers if they purchase from factories that dont
open their doors to Better Work inspections. Reputational risk has been found to play
a critical role in improving compliance.); Steven Greenhouse, 2nd Supplier for Walmart
at Factory That Burned, N.Y. TIMES, Dec. 11, 2012, at A12 (noting that despite
Walmarts demurrals that it did not know unsafe subcontractors were producing its
garments, it was facing criticism for not taking more responsibility for its entire supply
chain).
143. See Vandenbergh & Cohen, supra note 15, at 224.
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146. See, e.g., THE CREDIBILITY OF TRANSNATIONAL NGOS: WHEN VIRTUE IS NOT
ENOUGH (Peter A. Gourevitch et al., eds., Cambridge Univ. Press 2012); see also
Clifford & Greenhouse, supra note 127.
147. See Vandenbergh et al., supra note 77, at 196667.
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156. See Robert Bernard, Going Carbon Neutral and Putting an Internal Price on
Carbon, MICROSOFT GREEN BLOG (May 7, 2012, 4:01 PM), http://blogs.msdn.com/b/
microsoft-green/archive/2012/05/08/going-carbon-neutral-and-putting-an-internal-priceon-carbon.aspx [http://perma.cc/Q8GS-K7S5]; Light, supra note 93, at 42. For others,
see GOOGLE, http://www.google.com/green/ [http://perma.cc/2JR5-NVMN] (last visited
June 15, 2015); GOLDMAN SACHS, http://www.goldmansachs.com/citizenship/environ
mental-stewardship-and-sustainability/operational-impact/operational-impact-pages/
promoting-energy-efficiency.html [http://perma.cc/586H-Q8RX] (last visited June 15,
2015) (committing to carbon neutrality by 2020); Arden Jobling-Hey, People & Planet
Positive: IKEA Plans to Go Energy-Neutral by 2020, BIZENERGY (Nov. 22, 2012, 10:29
PM),
http://www.bizenergy.ca/success-stories/people-planet-positive-ikea-plans-to-goenergy-neutral-by-2020/ [http://perma.cc/WN64-L2BE] (same). Not all firms have
maintained their commitments over time. See, e.g., Matthew Wheeland, Dell Backs
Away From Carbon Neutrality, Focuses on Efficiency & E-Waste, GREENBIZ (Sept. 6,
2011, 9:28 AM), http://www.greenbiz.com/news/2011/09/06/dell-backs-away-carbonneutrality-focuses-efficiency-e-waste [http://perma.cc/7LQ9-N3MX] (noting Dells shift
away from carbon neutrality focus after achieving carbon neutral status in 2008).
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171. See Eric Hendey, Does Divestment Work?, HARV. POL. REV.,
http://www.iop.harvard.edu/does-divestment-work [http://perma.cc/44MP-C5EC] (last
visited June 15, 2015); Jacob Park & Sonia Kowal, Socially Responsible Investing 3.0,
18 GEO. PUB. POLY REV. 17, 18 (2013) (noting that socially-responsible investors
account for over $3.7 trillion).
172. See RAINFOREST ACTION NETWORK, FINANCING GLOBAL WARMING: CANADIAN
BANKS AND FOSSIL FUELS (2008), available at http://ran.org/sites/default/files/
financing_global_warming.pdf [http://perma.cc/CZV8-JJWD].
173. Id. See UTOPIES, SUSTAINABLE DEVELOPMENT LABELING OF BANKING
PRODUCTS 3 (June 2008), available at https://www.financite.be/sites/default/
files/references/files/719.pdf [https://perma.cc/YY28-SEXZ]; Oliver Milman, Fossil Fuel
Divestment: Climate Change Activists Take Aim at Australian Banks, THE GUARDIAN
(Oct. 17, 2014, 7:51 PM), http://www.theguardian.com/environment/2014/oct/18/fossilfuel-divestment-climate-change-activists-take-aim-at-australias-banks [http://perma.cc/
LSJ3-H7KD].
174. See Campaigners Urge Consumer Divestment from Australian Big Banks,
CLIMATEWIRE, Oct. 21, 2014, http://www.eenews.net/climatewire/stories/1060007611/
feed [http://perma.cc/5833-RE9C].
175. For an overview, see Vandenbergh, supra note 3, at 15152.
266
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191. See CDP, COLLABORATIVE ACTION ON CLIMATE RISK: SUPPLY CHAIN REPORT
201314 (2014), available at https://www.cdp.net/CDPResults/CDP-Supply-ChainReport-2014.pdf [https://perma.cc/U67P-X7JT]; THE CARBON TRUST, CARBON
FOOTPRINTS IN THE SUPPLY CHAIN: THE NEXT STEP FOR BUSINESS 1420 (2006),
avaliable at http://www.carbontrust.com/resources/reports/footprinting/carbon-foot
prints-in-the-supply-chain-the-next-step-for-business [http://perma.cc/R626-VDL9].
192. Walmart Announces Goal to Eliminate 20 Million Metric Tons of Greenhouse
Gas Emissions from Global Supply Chain, WALMART (Feb. 25, 2010), http://
news.walmart.com/news-archive/2010/02/25/walmart-announces-goal-to-eliminate-20million-metric-tons-of-greenhouse-gas-emissions-from-global-supply-chain
[http://
perma.cc/GSH8-QN59]; Vandenbergh, supra note 3, at 158 (comparing reductions to
roughly half of iron and steel sector emissions).
193. Frances Beinecke, Wal-Mart and H&M Commit to Greening Their Textile
Supply Chain, NATURAL RESOURCES DEFENSE COUNCIL (Sept. 22, 2010) http://switch
board.nrdc.org/blogs/fbeinecke/wal-mart_and_hm_commit_to_gree.html [http://perma.
cc/6ZBV-3P6N].
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271
194. Linda Greer, NRDC Work on Apple Computers Supply Chain, NATURAL
RESOURCES DEFENSE COUNCIL (Feb. 22, 2012) http://switchboard.nrdc.org/
blogs/lgreer/nrdc_work_on_apple_computers_s.html
[http://perma.cc/9WG6-6DCQ].
NRDC has been active in the cloud of commitments initiative associated with Rio+20.
See Commitments, CLOUD OF COMMITMENTS, http://www.cloudofcommitments.org/
commitments/ [http://perma.cc/TZC2-76QP] (last visited June 15, 2015). NRDC also
publishes issue reports on carbon-saving opportunities in various industries along with
advice for firms. See, e.g., KAREN LAW & MICHAEL CHAN, NATIONAL RESOURCES
DEFENSE COUNCIL, CARBON REDUCTION OPPORTUNITIES IN THE CALIFORNIA
PETROLEUM INDUSTRY (2013), available at http://www.nrdc.org/energy/files/californiapetroleum-carbon-reduction-IB.pdf [http://perma.cc/C7CY-K6QH].
195. Partnerships: Coca-Cola, WORLD WILDLIFE FOUNDATION, http://www.world
wildlife.org/partnerships/coca-cola [http://perma.cc/B8YP-QJJJ] (last visited June 15,
2015).
196. Morten Vestberg, LEGO Group Partners with WWF and Focuses on Suppliers
to Reduce Climate Impact, WORLD WILDLIFE FOUNDATION (Nov. 27, 2013),
http://awsassets.panda.org/downloads/the_lego_group_climate_savers_partnership_271
12013.pdf [http://perma.cc/2ZNY-HYK4]. LEGO has announced a goal of reducing its
non-supply chain emissions by 10% (or 10,000 tons) from the 2012 levels, but roughly
90% of LEGOs emissions arise from its supply chain. Id. For additional examples, see
Volvo Group and WWF Expand Climate Partnership, WORLD WILDLIFE FOUNDATION
(Feb. 17, 2012), http://wwf.panda.org/?203564/Volvo-Group-and-WWF-expand-climatepartnership [http://perma.cc/Q6V3-FTPE]; Nike Partners with WWF and Center for
Energy and Climate Solutions to Reduce Greenhouse Gas Emissions, WORLD WILDLIFE
FOUNDATION (Oct. 2, 2001), https://www.worldwildlife.org/press-releases/nike-partnerswith-wwf-and-center-for-energy-and-climate-solutions-to-reduce-greenhouse-gasemissions [https://perma.cc/Y52E-BMLY]; LOreal Group: Using CDP to Sustainably
Manage Supply Chains and Reduce Carbon Emissions Across the Product Lifecycle,
CDP, https://www.cdp.net/en-US/WhatWeDo/Pages/case-study-loreal.aspx [https://
perma.cc/4729-FBHQ] (last visited June 15, 2015); WWF Climate Savers Partner Yingli
Green Energy Goes Beyond Targets for Reducing Emissions, WORLD WILDLIFE
FOUNDATION (JAN. 9, 2015), http://wwf.panda.org/?236730/Climate-Savers-Yinglitargets [ http://perma.cc/DS5F-XSUD].
272
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2020 are more than 450 million tons of fossil fuel CO2 per
year.224
The actions included in the behavioral wedge approach
include the purchase of more efficient home appliances, motor
vehicles, and heating and cooling equipment, as well as home
weatherization. The behavioral wedge actions also include
better use of existing technologies, such as more efficient
driving behavior, home thermostat use, and laundry
temperature settings.225 Policy plasticity is often high because
the behavioral wedge initiatives that target these actions are
the types of low-cost, non-coercive interventions that can be
conducted by private organizations.
A number of private governance responses that target
behavioral wedge-type actions are already underway.226 For
instance, new corporations such as Opower now offer
behavioral science-driven programs to electric utilities seeking
to reduce electricity demand from households, including
monthly feedback that compares a households energy use to
others in the community. Empirical studies suggest that these
interventions have reduced electricity use by one to three
percent.227
NGOs also have developed initiatives that target households.
The Union of Concerned Scientists Cooler Smarter campaign
encourages individuals to reduce their carbon emissions by
twenty percent in twenty days through twenty personalized
actions.228
The campaign asks participants to provide
224. This is an amount equal to the combined emissions of the U.S. petroleum
refining, iron and steel, and aluminum smelting industries. See Dietz et al., supra note
13. Over the long term, interventions that affect consumption and carbon emissions in
the emerging middle class households in China and India may present the greatest
opportunities. See, e.g., SIQI ZHENG ET AL., THE GREENNESS OF CHINA: HOUSEHOLD
CARBON DIOXIDE EMISSIONS AND URBAN DEVELOPMENT 2425 (Natl Bureau of Econ.
Research, Working Paper No. 15621, 2009).
225. Dietz et al., supra note 72, at tbl.1.
226. Many NGOs developed documents to assist in the design of household
initiatives. See, e.g., AMERICAN COUNCIL FOR ENERGY EFFICIENT ECONOMIES, http://
www.aceee.org/ [http://perma.cc/6N6C-H84K] (last visited June 15, 2015).
227. See ED CARROLL ET AL., FRANKLIN ENERGY, RESEARCH STUDY: RESIDENTIAL
ENERGY USE BEHAVIOR CHANGE PILOT (2009), available at http://www.climate
access.org/sites/default/files/Carroll_Residential%20Energy%20Use%20Behavior%20C
hange%20Pilot.pdf [http://perma.cc/WF3N-RVQW].
228. UNION OF CONCERNED SCIENTISTS, http://www.coolersmarter.org [http://
perma.cc/A3CY-VZHJ] (last visited June 15, 2015).
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281
Id.
Id.
Id.
How to Reduce Your Energy Consumption, NATURAL RESOURCES DEFENSE
COUNCIL, http://www.nrdc.org/air/energy/genergy.asp [http://perma.cc/4JJU-8M3A]
(last visited June 15, 2015). The NRDC also publishes an Energy Efficiency guide,
which encourages individuals to look for Energy Star labeled home appliances and
choose appliances that utilize natural gas over electricity. Efficient Appliances Save
Energyand Money, NATURAL RESOURCES DEFENSE COUNCIL, http://www.nrdc.org/
air/energy/fappl.asp [http://perma.cc/373P-RRGE] (last visited Apr. 22, 2015).
233. GREENPEACE, GUIDE TO GREENER ELECTRONICS (2012), available at
http://www.greenpeace.org/international/Global/international/publications/climate/201
2/GuideGreenerElectronics/Guide-Ranking-Criteria-v18.pdf
[http://perma.cc/AB4KWXWZ].
234. Green-e National Standards and Governing Documents, GREEN-E, http://www.
green-e.org/getcert_re_stan.shtml [http://perma.cc/7TPF-W9HL] (last visited June 15,
2015).
235. Meat Eaters Guide to Climate Change and Health, ENVIRONMENTAL WORKING
GROUP,
http://www.ewg.org/meateatersguide/helpful-tips-for-meat-eaters/
[http://
perma.cc/CXP4-YRBN] (last visited June 15, 2015).
236. See NATURAL RESOURCES DEFENSE COUNCIL, A CITIZENS GUIDE TO LEED FOR
NEIGHBORHOOD DEVELOPMENT: HOW TO TELL IF DEVELOPMENT IS SMART AND GREEN
282
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2, available at https://www.nrdc.org/cities/smartgrowth/files/citizens_guide_LEEDND.pdf [https://perma.cc/D97T-GH6C] (last visited June 15, 2015). The publication
provides households with information on community features that reduce GHG
emissions, including walk-able streets and others. Id. at 3.
237. See ECOAMERICA, http://ecoamerica.org/ [http://perma.cc/V5FB-D7XL] (last
visited June 15 2015). The MomentUs overview document includes a national
campaign to to build a values majority of support among Americans for effective action
on climate that leads to national, state, and local institutional, individual, and public
policy action. See ECOAMERICA, MOMENTUS DESIGN DOCUMENT, available at http://
ecoamerica.org/wp-content/uploads/reports/MomentUs_overview.pdf [http://perma.cc/
ERH2-EEVL] (last visited June 15, 2015).
238. EUROPEAN ENVIRONMENTAL AGENCY, ACHIEVING ENERGY EFFICIENCY
THROUGH BEHAVIOR CHANGE: WHAT DOES IT TAKE? 2425 (2013).
239. Id.
240. See Jack N. Barkenbus, Eco-Driving:
An Overlooked Climate Change
Initiative, 38 ENERGY POLY 762, 765 (2010). A number of national and state
governments also have developed eco-driving programs.
See Thomas D.
Wuertenberger, The Regulation of CO2 Emissions Caused by Private Households, 16
MO. ENVTL. L. & POLY REV. 1, 45 (2009); SUSAN A. SHAHEEN ET AL., MINETA TRANSP.
INST., ECODRIVING AND CARBON FOOTPRINTING: UNDERSTANDING HOW PUBLIC
EDUCATION CAN REDUCE GREENHOUSE GAS EMISSIONS AND FULE USE 9 (2012),
available at http://transweb.sjsu.edu/PDFs/research/2808-ecodriving-greenhouse-gasemissions-fuel-use-public-education.pdf [http://perma.cc/T3CB-QNXR].
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286
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288
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266. See discussion, supra note 216; see also Robert Stavins & Richard Newell,
Evaluating the Energy Efficiency Gap,
DUKE UNIVERSITY ENERGY INITIATIVE,
http://energy.duke.edu/research/efficiency_project [http://perma.cc/6C3S-CTUS] (last
visited Apr. 22, 2015) (describing research project); Michael Levi, Gas Price Worries
and Climate Myopia, COUNCIL ON FOREIGN RELATIONS, Apr. 28, 2011, http://blogs.cfr.
org/levi/2011/04/28/gas-price-worries-and-climate-myopia/ [http://perma.cc/ZL97-2F8V]
(identifying the problem as a significant obstacle to reducing emissions by pricing
carbon).
267. See, e.g., Stern et al., supra note 135, at 484748 (assessing the potential for
measures that address energy-cost myopia and noting best practices).
268. See Wokje Abrahamse et al., A Review of Intervention Studies Aimed at
Household Energy Conservation, 25 J. ENVTL. PSYCH. 273 (2005).
269. See Andrea H. McMakin et al., Motivating Residents to Conserve Energy
Without Financial Incentives, 34 ENVTL. BEHAV. 848 (2002); John E. Petersen et al.,
Dormitory Residents Reduce Electricity Consumption When Exposed to Real-Time
Visual Feedback and Incentives, 8 INT. J. SUST. HIGH EDUC. 16 (2007); L. McClelland &
S.W. Cook, Energy Conservation Effects of Continuous In-Home Feedback in AllElectric Homes, 9 J. ENVTL. SYS. 169 (1979); ELECTRIC POWER RESEARCH INSTITUTE
(EPRI), RESIDENTIAL ELECTRICITY USE FEEDBACK: A RESEARCH SYNTHESIS AND
ECONOMIC FRAMEWORK (2009).
270. See Vandenbergh et al., supra note 106, at 74041 (citing studies).
290
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280. Id. at 1416. WSP reports that members typically reduce their carbon
footprint by ten percent in their first year as a participant in PACT. Id. at 14.
281. Swiss Re launched the program with the help of Off4Firms, which specializes
in designing employee programs, along with South Pole Carbon, and Wageningen
University. See Johannes Manser et al., Accelerating CO2 Emissions Reductions Via
Corporate Programmes 7 (Off4Firms Working Paper D2b.1, 2013), available at http://
www.off4firms.ethz.ch/wp-content/uploads/2012/04/Off4Firms-Working-Paper-2b-1.pdf
[http://perma.cc/5XP4-NMAD].
282. Although the first five years only resulted in 4,000 investments, a few minor
adjustments increased the investments to 1,700 in the sixth year of the program. On
the whole, the program has been very popular among employees, although the carbon
emissions reductions are unclear. Id at 17.
283. Sony Pictures Digital Productions Inc., Employee Eco-Incentives, SONY
PICTURES A GREENER WORLD, http://www.sonypictures.com/green/act/employeeinvolvement/employee-incentives.php [http://perma.cc/JE9F-FGRC] (last visited June
15, 2015). Since the inception of the program, Sony claims that over 300 employees
have participated, resulting in savings of over 200,000 gallons of gas and generating
over 500,000 kWh of clean power. Sony offers other incentives to employees who
commit to a greener daily commute, including preferred parking, access to charging
enabled parking spaces, transit pass discounts and secure bike racks. In 2012 Sony
launched a new interactive web-based platform called Practically Green, which
provides small everyday activities employees can undertake to reduce their carbon
footprints. Sony Pictures Digital Productions Inc., Small Acts: Greening Employees
Everyday Actions, SONY PICTURES A GREENER WORLD, http://www.sonypictures.com/
green/act/employee-involvement/commit-acts.php [http://perma.cc/4Y8Y-VQBH] (last
visited June 15, 2015).
284. See Cardwell, supra note 122.
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293
vi. Magnitude
What is the magnitude of the potential emissions reductions
from private governance initiatives directed at households?
The behavioral wedge approach suggests that by 2020 annual
emissions reductions of over 450 million tons of fossil fuel CO2
could be achieved in the U.S. alone.285 Further reductions from
the seventeen behavioral wedge actions could be achieved in
other countries.
In addition, although the initiatives discussed above include
several that would simply implement the behavioral wedge
actions, they also include others that were not included in the
behavioral wedge analysis (e.g., idling myth-busting and the
actions targeted by many employee programs), and these
actions could yield additional emissions reductions over the 450
million ton total. A lack of resources or expertise could lead to
reductions that are less than the 450 million ton estimate for
the U.S., but there are also indications that much greater
reductions could be achieved:
McKinsey estimates that
installing energy-efficient lighting, electronics, and appliances
could reduce household emissions worldwide by more than a
gigaton per year with net savings of more than $30 billion per
year.286 Behavior change in energy use could increase the
savings even more.287 NGOs could undertake a new effort to
expand the number of households targeted by these initiatives
and could include state-of-the-art interventions directed at
actions with the highest technical potential and behavioral
285. See SARA HAYES ET AL., CHANGE IS IN THE AIR: HOW STATES CAN HARNESS
ENERGY EFFICIENCY TO STRENGTHEN THE ECONOMY AND REDUCE POLLUTION (2014),
available at http://aceee.org/research-report/e1401 [http://perma.cc/9Q4V-LHX7].
286. MCKINSEY & CO., supra note 215 at 10709. Home energy efficiency measures
could reduce emissions by 2.4 billion tons per year, twice as much total abatement
opportunity as the commercial segment, and approximately 75% of the total
abatement potential . . . shows net economic benefits, with the remainder available at
very low cost. Id. Combined energy efficiency improvements in commercial and
residential buildings could reduce emissions by 1.6 billion tons per year by 2020 with
net savings of $50 billion. Id. Because 2/3 of the emissions reduction opportunity is in
residential buildings, it seems reasonable to ascribe 2/3 of the projected emissions
reduction and savings to residential buildings: roughly 1.1 billion tons per year
emissions reduction and $34 billion per year net savings. Id.
287. Id. at 108 (noting that [b]ehavioral change from building occupants could
reduce carbon emissions significantly beyond the abatement cost-curve model).
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plasticity.288
The new efforts also could be extended to
additional actions and countries.
Taken together, these considerations suggest that the total
potential annual emissions reductions during the 20162020
period from private governance initiatives directed at
households could easily exceed 500 million tons worldwide and
might even exceed a gigaton. Even the lower end of this range
is roughly equivalent to a regulation that reduced fossil fuel
CO2 emissions from the U.S. industrial sector by two-thirds.
The total is also the equivalent of assembling a second club of
countries (comprising Australia, the U.K., Saudi Arabia, and
Italy, all among the top twenty emitters in the world) that all
commit to a reduction in annual fossil fuel CO2 emissions by an
amount equal to twenty-five percent of 2012 levels.289
C. Aggregate Effects
How significant are the reasonably achievable emissions
reductions when we include both household and corporate
private climate governance? When combined with the 500
million tons available from corporate initiatives, the 500
million tons of household emissions reductions yield roughly a
gigaton of annual emissions reductions. This is roughly
equivalent to a regulatory approach that eliminated all U.S.
industrial CO2 emissions or half of all U.S. CO2 emissions from
electricity generation. It is also equivalent to a club of eight of
the twenty greatest emitters of fossil fuel CO2 (Australia,
Brazil, Canada, Indonesia, Italy, Mexico, Saudi Arabia, and the
U.K.) reducing their annual emissions by twenty-five percent of
2012 levels.
All of these measures only require taking actions that can be
done easily and cheaply, using readily available commercial
technology. Only conceptual and behavioral inertia and access
to commercial and philanthropic capital stand in the way of
these measures. The cost of borrowing is extremely low around
the world, so inertia appears to be the principal obstacle. Thus,
we believe that effective private governance could achieve rapid
implementation of these measures. They would not represent
288. See infra Part V.C.
289. GLOBAL CARBON BUDGET, supra note 219.
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291. See, e.g., NORDHAUS, supra note 22, at 26667 (claiming that alternatives to
carbon pricing . . . are generally more expensive[,] . . . unlikely to achieve ambitious
[emissions reduction] targets[,] . . . [and can be] extremely expensive or even
counterproductive). Some economists have examined the political feasibility of a
carbon price. See, e.g., Joseph E. Aldy & Robert Stavins, The Promise and Problems of
Pricing Carbon: Theory and Experience, 21 J. ENVT & DEV. 152 (2012) (evaluating
political feasibility); Guzman, supra note 23, at 228 (noting that [b]y comparison, capand-trade is less potentially toxic than a carbon tax).
292. See Elinor Ostrom, A Diagnostic Approach for Going Beyond Panaceas, 104
PROC. NATL ACAD. SCI. 15181, 15182 (2007); Gilligan & Vandenbergh, supra note 24,
at 6.
293. OSTROM, supra note 4, at 2123.
294. Kevin A. Stack & Michael P. Vandenbergh, The One Percent Problem, 111
COLUM. L. REV. 1385, 1401 (2011).
295. Id.
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C. Concrete Steps
The principal assertion of this Article is that a conceptual
shift should occur among scholars, philanthropists, and
business and NGO managers regarding the role of private
climate governance over the next decade. This conceptual shift
has the potential to galvanize support for existing private
governance initiatives and lead to the formation of new
initiatives.
Although the examples discussed above
demonstrate the extent of current private climate initiatives
and identify new initiatives, it is fair to ask whether additional
concrete steps can be taken to implement a private climate
governance strategy.
One option is to form a new NGO or endowment that could
implement or fund specific new initiatives such as the
prediction market and legacy registry.305 The new organization
also could promote other cross-cutting initiatives, such as
collecting and disclosing the total emissions reductions
achieved from private climate governance efforts each year at
the U.S. and global levels.306 The tracking and disclosure of
emissions reductions attributable to private governance may be
necessary to demonstrate the efficacy of the strategy and reveal
the level of additional effort needed.307 Although it is tempting
to suggest that formation of a new organization is the best way
to promote a coherent, effective private climate governance
strategy, it is not clear that the benefits of a new organization
would exceed the costs of forming and staffing yet another
NGO. Any of the leading NGOs, or a cooperative effort among
them, could take on this role. Whether the organizational form
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301
308. See Vandenbergh & Steinemann, supra note 14, at 171416 (noting that
conservatives may respond to campaigns that emphasize personal responsibility for
emissions reductions).
309. See Amanda C. Leiter, Fracking, Federalism and Private Governance, 38 HARV.
ENVTL. L. REV. (forthcoming 2014); David A. Dana & Hannah J. Wiseman, A Market
Approach to Regulating the Energy Revolution: Assurance Bonds, Insurance, and the
Certain and Uncertain Risks of Hydraulic Fracturing, 99 IOWA L. REV. 1523 (2014);
Thomas W. Merrill & David M. Schizer, The Shale Oil and Gas Revolution, Hydraulic
Fracturing, and Water Contamination: A Regulatory Strategy, 98 MINN. L. REV. 145
(2013).
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310. See Cass R. Sunstein & Lucia A. Reisch, Automatically Green: Behavioral
Economics and Environmental Protection, 38 HARV. ENVTL. L. REV. 127 (2014).
311. For example, annual university sustainability rankings could give primacy to
net annual carbon emissions. Under current methodologies, a university may be able
to score well even if its annual carbon emissions increase.
312. See, e.g., Michael P. Vandenbergh et al., Micro-Offsets and MacroTransformation: An Inconvenient View of Climate Change Justice, 33 HARV. ENVTL. L.
REV. 303, 31048 (2009) (proposing carbon micro-offset markets).
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303